Real estate market trends for the year. A real estate market that runs on its own
The RRG company presented the results of a study of the commercial real estate market for 2017. The main conclusions that were drawn by analysts:
1. The volume of supply on the sales market has decreased significantly over the year, with a simultaneous significant reduction in prices. In the rental market, on the contrary, rates remained at the level of December 2016, with a less significant decrease in the volume of supply.
2. The volume of supply on both the rental and sales markets increased over the year only for retail premises. In the rental market, a decrease in rates was observed only for retail properties, and in the sales market, the decrease in prices for them in comparison with other types of real estate was maximum.
3. For individual segments in the rental and sales markets, the situation is as follows:
The reduction in rates for retail properties was less significant compared to the reduction in prices and differed little for facilities both within and outside the Garden Ring. For street retail properties, rates and prices outside the center decreased insignificantly, while in the center they decreased much more significantly (especially prices).
With the exception of offices rented outside the center, the volume of supply of office properties has seriously decreased, but while rates have increased moderately (more significantly in the center), prices have decreased (more significantly within the Garden Ring).
The total area of industrial and warehouse premises on the rental market has decreased significantly, and rates have increased slightly. In the sales market, both supply volume and prices decreased at an average rate.
Main conclusion
The lack of growth in the commercial real estate market, as before, is associated with an insufficient level of business activity in the construction of new facilities and extremely modest macroeconomic indicators. Despite the increase in investment in commercial real estate in Russia in 2017 by 27% compared to 2016, the lag in investment volume from the pre-crisis level of 2013 is more than twofold. In such conditions, the rental market feels more confident than the sales market.
The implementation of pent-up demand in the low office market due to low business activity is not yet capable of leading to an increase in prices even in the face of a reduction in supply. The situation on the rental market is somewhat better, but the increase in rates is insignificant. Consumer demand remains low due to both low incomes of the population and the predominance of saving behavior. These factors have a negative impact on the retail space market in general and on the overstocking of the sales market in particular.
In 2018, the year of the presidential elections, investment activity is likely to be traditionally low. Given the lack of growth in investment and business activity, it can be assumed that there will be no noticeable improvement in the commercial real estate market during the year.
Sale
Market as a whole
Supply volume
With the exception of the start of the year and a major spike in October, supply remained relatively stable in 2017. From December 2016 to December 2017, the volume of supply in terms of quantity decreased by 17%, and in terms of total area - by 31% and amounted to 1,331 objects with a total area of 1,738 thousand square meters. m
Price indicators
Prices gradually decreased throughout the year, with two price corrections occurring in February and August. The decrease in ruble prices over the year was comparable to the figures for 2016 and amounted to 10%, and in dollar prices - 20%. The weighted average price on the Moscow commercial real estate market in December 2017 decreased to 168,804 rubles/sq.m. m, or $2,865/sq. m
The decline in prices, as in 2016, occurred in the context of a decrease in supply, which may indicate a lack of growth in demand under the influence of more than modest macroeconomic indicators. The total volume of supply by value from 469 billion rubles. in December 2016 decreased by 38% and in December 2017 amounted to 293 billion rubles.
Supply volume
In 2017, the supply volume for the total area of retail premises increased by 42%. In all other segments, on the contrary, the volume of supply decreased: by 45% for office premises, by 32% for industrial and warehouse premises, and by 9% for free-use premises.
The volume of supply in December 2017 amounted to 355 retail properties with a total area of 319 thousand square meters. m, 718 office buildings with a total area of 843 thousand sq. m. m, 101 production and warehouse premises with a total area of 353 thousand square meters. m and 157 free-use premises with a total area of 223 thousand square meters. m.
In the market structure by total area, the leading position in December 2017, as before, was occupied by office premises, the share of which in the market was 61%, the second place with a share of 19% was occupied by industrial and warehouse premises, the share of free-use premises was 11%, and the share of retail premises is 9%. The share of office premises decreased by 3 percentage points over the year, the share of retail premises increased by 2 percentage points, the share of free-use premises decreased by 7 percentage points, and the share of industrial and warehouse premises increased by 8 percentage points.
Judging by the decrease in the average area of exhibited office and industrial warehouse facilities by 23 and 27%, respectively, large premises are gradually being washed out of the market. On the contrary, for retail properties and free-use premises, the average area of which increased by 22 and 13% over the year, demand shifted towards smaller facilities.
Price indicators
A decrease in prices was observed in all segments and amounted to: 16% for retail premises, 13% for office premises, 11% for industrial and warehouse premises and 1% for free-use premises.
The volume of supply in value terms for retail facilities increased by 20%, for office premises decreased by 52%, for industrial and warehouse premises - by 39%, and for free-use premises - by 10%.
The minimal decrease in prices for vacant premises compared to other types of real estate can be explained by the imbalance that arose in price dynamics in 2016, when the decrease in prices for such objects was maximum. Therefore, most likely, in this case, we are talking only about a price correction, but otherwise the demand for different types of commercial real estate decreased on a comparable scale.
The maximum reduction in prices in 2017 was noted for retail premises against the backdrop of a significant increase in their supply volume. This may be due to overstocking of the market due to low consumer demand in conditions of low incomes and the spread of the savings behavior model of the population.
Retail real estate
Supply volume
In December 2017, the total area of supply of retail real estate in the center increased by 19% compared to December 2016, and outside the center - by 44%.
In total, in December 2017, 38 properties within the Garden Ring and 317 properties outside it with a total area of 20 and 299 thousand square meters were put up for sale. m respectively. The total supply of retail premises in December amounted to 355 objects with a total area of 319 thousand square meters. m with an average facility area of 900 sq. m.
Price indicators
Prices for retail facilities both in the center and outside from December 2016 to December 2017 decreased by 14% and amounted to RUB 622,400 per sq. m., respectively. m and 194,422 rubles/sq. m. The price for all retail premises in 2017 decreased by 16% to RUB 220,759/sq. m. The value of the supply of retail premises over 12 months in the center increased by 3%, and in the periphery - by 24%.
Street-retail
The volume of supply of street-retail format objects in 2017 in terms of total area increased by 51% and amounted to 34 thousand sq. m. m. In the center, the total area of exhibited objects increased by 114% to 6 thousand square meters. m, and beyond - by 41% and amounted to 27 thousand square meters. m.
The weighted average price in the city as a whole decreased by 8% and amounted to RUB 382,352 per sq. m. m/year. In the center, prices decreased by 33% to RUB 732,913/sq. m/year, and beyond - by 4% to RUB 301,778/sq. m/year.
Compared to 2016, the situation in price dynamics has changed, and if in 2016 the maximum reduction in prices was observed for premises outside the center, then in 2017 the maximum reduction in prices was observed for objects already in the center. This situation indicates the instability of market development.
Office real estate
Supply volume
The volume of office supply in the center decreased by 53% in total area and by 49% in number, while outside the center it decreased by 44% in total area and increased by 23% in number.
In total, in December 2017, 102 objects with a total area of 87 thousand square meters were exhibited. m within the Garden Ring and 616 objects outside it with a total area of 756 thousand sq. m. m. The total supply of office space amounted to 718 objects with a total area of 843 thousand square meters. m with an average area of one object of 1,174 sq. m.
Price indicators
Over the 12 months from December 2016 to December 2017, the weighted average price for office properties in the center decreased by 24% to RUB 327,424/sq.m. m, and outside the Garden Ring decreased by 8% to RUB 168,994/sq. m The weighted average price for all office premises in 2017 decreased by 13% and amounted to RUB 185,378/sq. m.
Judging by the significant reduction in prices for office properties in the center in 2017, the demand for them, after growth in 2016, has decreased significantly.
The decrease in supply volume in value terms amounted to 64% to 28 billion rubles. within the Garden Ring and 48% to 127 billion rubles. outside its borders, and in general the cost of office properties in 2017 decreased by 52% to 156 billion rubles.
Rent
Market as a whole
Supply volume
The volume of supply throughout 2017 fluctuated noticeably from month to month, but in general we can say that it grew until the summer, after which it decreased. The overall decrease in supply by area over 12 months was 7%. In December 2017, 2,992 objects with a total area of 1,467 thousand square meters were exhibited on the market. m
Price indicators
Rental rates throughout 2017, as well as the volume of supply, fluctuated, but not significantly. The average rental market rate from December 2016 to December 2017 increased by 1% in ruble terms and decreased by 9% in dollar terms. In December, the average rental rate was 18,236 rubles/sq.m. m/year, or $313/sq. m/year.
Against the backdrop of low inflation (2.5% for 2017 according to Rosstat) and extremely modest other macroeconomic indicators, a 1% rate increase can be assessed as a very good indicator characteristic of our “new economic reality.” Compared to the sales market, the rental market for all types of real estate in these conditions is doing significantly better.
Comparative analysis by segments
Supply volume
The growth rate of supply by total area in 2017 in the rental market was +4% for retail, -5% for office and -13% for industrial and warehouse real estate. The total area of exhibited objects in December 2017 was: 221 thousand square meters. m for retail, 750 thousand sq. m. m for office and 496 thousand sq. m. m for production and warehouse facilities. Throughout 2017, the average area of exhibited retail premises decreased by 8%, industrial and warehouse premises - by 15%, office premises - by 13%.
Price indicators
The average rate for retail premises from December 2016 to December 2017 decreased by 5% to RUB 30,627/sq.m. m/year, for office space - increased by 3% to RUB 17,129/sq. m/year, for production and warehouse premises increased by 2% and amounted to 6,526 rubles/sq. m/year. Judging by the decrease in rental rates, retail premises were in the least demand.
The change in the annual total rent from December 2016 to December 2017 was +23% for retail, -3% for office and -13% for industrial and warehouse premises.
After a slight increase in rates for retail premises in 2016, when rates for office real estate and industrial and warehouse premises decreased, the situation changed to the exact opposite. Low demand for retail space, as well as in the sales market, may be caused by low incomes of the population and the predominance of a savings model of behavior.
Retail real estate
Supply volume
The volume of supply of retail space by area in December 2017 in the center decreased by 31%, while outside the Garden Ring it increased by 7%. The change in the number of exhibited objects was -31% and +18%, respectively.
In total, in December 2017, 43 objects with a total area of 10 thousand square meters were put on the market. m within the Garden Ring and 625 objects with an area of 211 thousand square meters. m beyond. The total supply of retail premises amounted to 668 objects with a total area of 221 thousand. sq. m with an average area of one object of 331 sq. m.
Price indicators
The average rate for objects in the center from December 2016 to December 2017 decreased by 2% to 62,471 rubles/sq.m. m/year, and for properties outside the Garden Ring did not change and amounted to 28,438 rubles/sq. m/year. Judging by the significant reduction in rates for objects in the center for the second year already, the demand for them is declining. Annual rent for properties within the Garden Ring decreased by 31%, and outside the Garden Ring increased by 34%.
Street-retail
The volume of supply of street-retail format objects over 12 months in terms of total area increased by 12%, incl. in the center decreased by 6%, and outside it increased by 14% and amounted to 17 objects with a total area of 3 thousand square meters. m in the center and 224 objects with an area of 61 thousand square meters. m beyond.
The average rental rate for 12 months decreased by 9% to RUB 33,948 per sq. m. m/year, while in the center it decreased by 16% to RUB 70,361/sq. m/year, and outside it - by 4% to RUB 31,184/sq. m/year,.
The situation with demand for street-retail in the center is somewhat different from the situation for retail premises in general in that in 2016 prices for street-retail in the center were growing. However, in 2017, the decrease in prices for such objects clearly exceeds the decrease in prices for street-retail in the periphery.
Office real estate
Supply volume
The volume of office supply by total area from December 2016 to December 2017 decreased by 45% in the center and increased by 1% outside it. The change in the number of exhibited premises was -28% and +16%, respectively.
In total, in December 2017, 174 objects were exhibited within the Garden Ring and 1,612 objects outside it with a total area of 57 and 693 thousand square meters. m respectively. The total supply of office space in December amounted to 1,786 objects with a total area of 750 thousand square meters. m with an average area of one object of 420 sq. m.
Price indicators
The average rate for office properties in 2017 generally increased by 3% to RUB 17,129/sq.m. m/year. Within the Garden Ring, the average rate increased by 10% and amounted to 28,049 rubles/sq.m. m/year, and in the periphery - by 5% to 15,950 rubles/sq. m/year. The total annual rent for office offers in the center decreased by 38%, and outside the Garden Ring - increased by 5%. Judging by the changes in rates over the past 2 years, the demand for office properties in the center is higher than outside it.
Main conclusions
1. The volume of supply on the Moscow commercial real estate sales market has decreased significantly over the year, with a simultaneous significant reduction in prices. On the contrary, in the commercial real estate rental market, rates remained at the level of December 2016, with a less significant decrease in supply volume.
2. The volume of supply in both the rental and sales markets increased over the year only for retail premises. In the rental market, a decrease in rates was observed only for retail properties, and in the sales market, the decrease in prices for them in comparison with other types of real estate was maximum .
3. For individual segments in the rental and sales markets, the situation is as follows:
The reduction in rates for retail properties was less significant compared to the reduction in prices and differed little between properties both within and outside the Garden Ring. For street retail properties, rates and prices outside the center decreased insignificantly, while in the center the rates and, especially, prices decreased much more significantly.
With the exception of offices rented outside the center, the volume of supply of office properties has seriously decreased, however, while rates have increased moderately (more significantly in the center), prices have decreased (more significantly within the Garden Ring).
The total area of industrial and warehouse premises on the rental market has decreased significantly, and rates have increased slightly. In the sales market, both supply volume and prices decreased at an average rate.
Main conclusion:
The lack of growth in the commercial real estate market, as before, is due to the insufficient level of business activity in the construction of new facilities and extremely modest macroeconomic indicators. Despite the growth of investments in commercial real estate in Russia, in 2017 by 27% compared to 2016, the volume of investments lags behind the pre-crisis level of 2013 is more than double. In such conditions, the rental market feels more confident than the sales market.
The implementation of pent-up demand in the low office market due to low business activity is not yet capable of leading to an increase in prices even in the face of a reduction in supply. The situation on the rental market is somewhat better, but the increase in rates is insignificant. Consumer demand remains low both due to low incomes of the population and the predominance of the saving behavior model. These factors have a negative impact on the retail space market in general, and on the overstocking of the sales market in particular.
In 2018, the year of the presidential elections, investment activity is likely to be traditionally low. Given the lack of growth in investment and business activity, it can be assumed that there will be no noticeable improvement in the commercial real estate market during the year.
Prices in the real estate market have remained unchanged for a long period, while the downward trend continues. Based on the results of 2017, we can say that favorable conditions have emerged for purchasing real estate, which is also associated with a decrease in mortgage rates, which reaches 7% per annum. There are preferential programs, government subsidies, and discounts from developers. So is it worth buying a home or is it better to postpone the deal until next year? What are the prospects for the real estate market? Is investing in housing profitable and economically justified?
The situation on the real estate market at the end of 2017
At the end of 2017, the real estate market shows a downward trend in prices, which makes it possible to purchase housing at a moderate price. Population demand is limited, and supply is constantly growing. In Moscow the following situation arises:
Developers constantly hold promotions, partnerships and price discounts for clients, which is caused by fierce competition in the industry. At the end of 2017, prices did not increase, but the commissioning of new buildings increased significantly.
Should residents of the capital buy apartments with a mortgage or is it better to wait until next year? Experts believe that the current situation in the real estate market is the most favorable for purchasing housing. The lowest mortgage rate is 6.75%, it is subsidized by the developer. Of course, we can expect that in the coming years a promotional rate of 6% will be applied, but it is already profitable to purchase apartments.
Today, mortgage rates have dropped significantly, and banks are implementing a variety of schemes for purchasing properties. Even if the mortgage turns out to be more profitable in 2018, you can refinance the existing loan.
Should I buy a home with a mortgage or is it better to save the required amount? Of course, each person decides this independently. If you find a suitable apartment that suits you completely at the price, it’s worth taking out a loan. If there are no optimal offers on the market yet, you can continue saving. True, there is a risk of financial turmoil and loss of savings, as was the case in 2014. For those who save, it is better to convert more than half of their savings into foreign currency and put it in Sberbank or VTB - in cash in a safe deposit box.
The price tag for housing from the developer turns out to be lower due to low demand and the impressive volume of square meters put into operation. How much money is needed to purchase a primary home?
In general, buying an apartment from a developer is the most attractive option. Not only are there promotions and reduced rates waiting for you, but the prices are affordable. So, by choosing an apartment in the new Liner complex and paying 100% of its cost, you will receive designer finishes and a kitchen equipped with modern appliances.
Should we expect that housing prices in Moscow will decrease and that buying apartments will be much more profitable than now? This trend exists, but making long-term forecasts is problematic. Experts believe that by 2021 prices will reach the following levels:
But it’s not worth talking about the average price, because it depends not only on the prospects for market development, the level of supply and demand, but also on the selected object, its location, and the availability of infrastructure.
The investment attractiveness of real estate, although reduced based on the results of previous years, will still remain. It is still advisable to invest money at the construction stage and then resell the apartments on assignment. There are still classic investors on the market who purchase square meters for resale in a few years, as well as for rental.
There is no need to expect a sharp reduction in prices in 2018, although buyers may find an interesting offer due to impressive discounts from the developer. However, usually promotions do not apply to the entire volume of apartments - it is impossible to guarantee that the offer will suit you. One cannot count on a significant reduction in prices - the cost of housing is already extremely low, and given the constant rise in price of land, building materials and construction, developers simply cannot afford even greater discounts.
It’s really worth buying an apartment with a mortgage today, especially if your savings are not growing fast enough. If you manage to save at least 100-200 thousand a month, you should wait so as not to borrow a large amount from the bank.
real estate market prospects,
The situation on the real estate market at the end of 2017 The real estate market at the end of 2017 shows a downward trend in prices, which makes it possible to purchase housing at a reasonable price. Population demand is limited, and supply is constantly growing. In Moscow the following situation arises:
- Real estate is of less and less interest to investors and speculators planning to invest money in the short term;
- Unlike the market in other cities, luxury housing is in great demand in the capital - developers are erecting premium class buildings. Thus, over 140 thousand sq.m. will soon appear in Ramenki. business class housing;
- It is advisable to invest money in the early stages of construction, for example, in the Garden Quarters complex, the price of a meter is initially 450 thousand rubles, and at the readiness stage it increases to 600 thousand;
- The quality of facilities has improved significantly compared to the last decade. As competition grows, so does the level of comfort - comfort-class facilities are equipped with developed infrastructure and unusual planning solutions;
- The boundaries between housing classes are blurring, and you can buy a comfort-level apartment even cheaper than the economy segment.
- Apartments with small areas and corresponding prices are still in great demand. Not everyone can afford to buy a large and comfortable apartment in Moscow right away.
Mortgage – is it worth taking out in 2017?
Should residents of the capital buy apartments with a mortgage or is it better to wait until next year? Experts believe that the current situation in the real estate market is the most favorable for purchasing housing. The lowest mortgage rate is 6.75%, it is subsidized by the developer. Of course, we can expect that in the coming years a promotional rate of 6% will be applied, but it is already profitable to purchase apartments. Today, mortgage rates have dropped significantly, and banks are implementing a variety of schemes for purchasing properties. Even if the mortgage turns out to be more profitable in 2018, you can refinance the existing loan. Should I buy a home with a mortgage or is it better to save the required amount? Of course, each person decides this independently. If you find a suitable apartment that suits you completely at the price, it’s worth taking out a loan. If there are no optimal offers on the market yet, you can continue saving. True, there is a risk of financial turmoil and loss of savings, as was the case in 2014. For those who save, it is better to convert more than half of their savings into foreign currency and put it in Sberbank or VTB - in cash in a safe deposit box.What is more profitable: housing outside the Moscow Ring Road or within it?
The price tag for housing from the developer turns out to be lower due to low demand and the impressive volume of square meters put into operation. How much money is needed to purchase a primary home?- If proximity to the center is not important, you can find a lot of interesting options outside the Moscow Ring Road. For example, in New Moscow, in the Spanish Quarters residential complex, three-room apartments are sold for 6.5 million rubles;
- If you are looking for housing with developed infrastructure nearby, one-room apartments are the most affordable budget option. For 5.3 million you can buy a studio on Khodynskoe Field with the Aquapark shopping center, schools and kindergartens nearby;
- Secondary housing is sold at a price that directly depends on the location of the building and the desires of the owner.
Prospects for the development of the real estate market: what to expect?
Should we expect that housing prices in Moscow will decrease and that buying apartments will be much more profitable than now? This trend exists, but making long-term forecasts is problematic. Experts believe that by 2021 prices will reach the following levels:- Secondary housing – 100-140 thousand rubles per sq.m.;
- New economy class buildings – 100 thousand;
- Comfort segment housing – 120-140 thousand;
- Business class – less than 200 thousand.
Leading real estate market analysts believe that the market has already found the bottom and its recovery will begin next year
Interviewed by Pavel Yaklashkin
Most likely, in 2017, demand will remain at the level of 2016, perhaps we will notice an increase of 10-15%, subject to a favorable economic and political situation in the country.
Director of the consulting and project management department at Metrium Group Anna Sokolova:
I believe that 2017 will be similar to the outgoing year in terms of price dynamics: the increase in the cost of new buildings will be restrained by intense competition in the market due to the large volume of supply. However, unlike the current year, it will be characterized by more positive trends in the economy, as many analysts expect an increase in GDP. I do not rule out that this will encourage wealthy clients, who are currently taking a wait-and-see approach, to make purchases.
In addition, further reductions in mortgage rates are possible. In particular, Sberbank has already announced a promotion with rates reduced by 0.5%, which will be valid in January. Thus, the minimum rate on a mortgage loan from Sberbank next year will drop even below the subsidized rate (11.5%). I believe that other systemically important banks will follow Sberbank’s example. Competition between lenders is growing in the mortgage market, which, even without government support, will push them to reduce the cost of their loan offers.
The real estate market plays by its own rules. Whoever understands and learns them better will get an advantage
Until now, it was a priori believed that the real estate market most directly depends on the macroeconomic situation. But, as experts note, recently it is increasingly living its own life, developing on the basis of its own laws. At first glance, this seems very strange, but this circumstance has its own explanations.
The situation in the real estate market - everything bad has already happened
This situation has been typical for the last year and a half; the real estate market is paying less and less attention to what is happening in the economy as a whole. According to the head of the IRN Analytical Center. RUOleg Repchenko, there is a transition to a new reality. In essence, a new construction business model has emerged.
It is based on the quasi-stability existing in the economy. Everything bad that could happen has already happened. If at the beginning of the crisis the real estate market was buzzing like a disturbed hive, now it has calmed down and continues to build. Moreover, the lower the prices, the greater the supply. In some ways, this is reminiscent of the oil market, where no one wants to reduce production volumes for fear of losing sales niches. So the manufacturers cannot agree among themselves.
More for the same money
It is this factor that largely determines the fact that developers are trying not to reduce the volume of commissioning, as they understand that the vacated space will immediately be occupied by others. Therefore, today the principle in the market is: “More for the same money.” This is achieved by providing discounts and lowering the mortgage interest rate. Everything possible, and sometimes impossible, is being done so as not to reduce supply. As a result, at the moment in Moscow and the Moscow region it has reached a historical maximum of 7.5 million square meters. m.
Developers are not stopped even by the fact that if previously, out of 3 million square meters commissioned in Moscow. m everything was sold, now only half. In order to somehow exist in such conditions, companies are delaying construction deadlines and increasing the volume of unfinished construction. Now 25% of all unsold apartments are in new buildings; not so long ago their number did not exceed 2%. Thus, there is a rapid overstocking of the market even with a decrease in sales. These two indicators are increasingly at odds with each other. The rapprochement between them will begin when they start buying more at falling prices and building less.
As Oleg Repchenko predicts, if the volume of supply is seriously reduced, prices will stabilize fairly quickly. If not, then they will slide down for at least two years at 10%. And so far the second option looks more realistic.
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The renovation announced by the Moscow government will also act in this direction. On the one hand, additional housing will be built, and on the other, market demand from those who fall into this program will decrease.
This requires commercial developers to respond accordingly. They need to sell off their inventory as quickly as possible. If this fails, cheaper housing built under the renovation program will enter the market. It will lower prices even more, and companies will have to sell their products even cheaper. But with the sale, many may fly away, since there is a danger that demand may decrease in the near future. Our people think and act quite pragmatically, so they will decide: why buy now if after a while renovation will bring down prices. It's better to wait.
Another trend is also noted: the number of apartments is becoming more and more, and the volume of commissioned square meters is 30-35% less. Therefore, today it is necessary to offer significantly more apartments in order to earn the same amount from them as a couple of years ago.
Disappointed Investor Syndrome
Over the past quarter of a century, the Moscow real estate market has had an elite character. It was designed for wealthy buyers, at best wealthy. Over the past period, this contingent has bought real estate for themselves, their children, and even their grandchildren. And today the rich don’t particularly need it, they have it in abundance. Many do not know what to do with this wealth; it has become illiquid. This property also puts pressure on the market and further increases its supply.
A new illness is spreading more and more in the capital - the disappointed investor-real estate seller syndrome. Once upon a time, people bought apartments and houses in the hope of selling them at the right time. Now for many it has come, but the goods cannot find a buyer. There may not be a single offer for six months. We are witnessing the “tulip” fever, only not in Holland, but in Moscow.
Many people still live with the hope that the situation will improve, prices will rise, and demand will increase. Alas, analysts agree that this will not happen; the bubble in the capital’s real estate market will not inflate again.
Some people lose, some people find
But in the current situation there are those who will benefit. First of all, people with average incomes. They will be able to purchase housing in areas where previously they would not even venture for these purposes.
In these conditions, those developers and builders who are able to offer a new model in the real estate market and who are able to show maximum flexibility will have an advantage. Those builders who stubbornly refused to reduce prices, who believed it was better to go bankrupt than to sell cheaper, have left the market or are in line to leave. The new approach is based on a much more realistic price-performance ratio, something that has been largely absent for many years. The quality was often poor and the price was enormous.
But times have changed, it’s time for people to change too.
Vladimir GURVICH